Barriga v. Ades Precision

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

PEDRO RIVERA BARRIGA, Appellant,

v.

ARIZONA DEPARTMENT OF ECONOMIC SECURITY, an Agency,

and

PRECISION AUTO BODY, LLC, Appellees.

No. 1 CA-UB 21-0107
FILED 9-6-2022

Appeal from the A.D.E.S. Appeals Board
No. U-1696238-001-B

VACATED AND REMANDED

COUNSEL

Christian Dichter & Sluga PC, Phoenix
By Katharine Myers
Counsel for Appellant

Arizona Attorney General’s Office, Phoenix
By Emily M. Stokes
Counsel for Appellee, ADES
 BARRIGA v. ADES/PRECISION
Opinion of the Court

OPINION

Judge Michael J. Brown delivered the opinion of the Court, in which
Presiding Judge Maria Elena Cruz and Judge Samuel A. Thumma joined.

B R O W N, Judge:

¶1 To receive unemployment benefits from the Arizona
Department of Economic Security (“ADES”), an employee who voluntarily
leaves employment must generally do so with good cause, A.R.S. § 23-
775(A)(1). This case requires us to interpret Arizona Administrative Code
(“A.A.C.”) R6-3-50515(C), which governs whether an employee has good
cause to quit because of “an intolerable work situation” due to
“inharmonious relations with a fellow employee.”

¶2 R6-3-50515(C)(2) lists two “factors [that] should be
considered” by ADES “[i]n determining whether a situation is intolerable,”
but we hold that other relevant factors may and should be considered in
determining whether intolerable work conditions existed. To the extent our
holding conflicts with statements in Murray v. Arizona Department of
Economic Security, 173 Ariz. 521, 523–24 (App. 1992), we disagree with those
statements. Because the ADES Appeals Board (“Board”) limited its analysis
to the two factors listed in the rule, we vacate the Board’s decision and
remand for consideration of all relevant factors that may have made the
work environment intolerable for appellant Pedro Rivera Barriga.
Depending upon the outcome of that analysis, the Board may also need to
consider whether Barriga quit for compelling personal reasons due to a
health or physical condition.

BACKGROUND

¶3 Neither party disagrees with the relevant factual findings
made by the administrative law judge (“ALJ”) after an evidentiary hearing.
Those findings were accepted by the Board and are summarized below.

¶4 Barriga worked for appellee Precision Auto Body, LLC
(“Precision”) as a detailer for several months before he quit in May 2020.
Barriga felt discriminated against because his supervisor “failed to hear him
out” on his access to an evaporative cooler “that he claimed was necessary
to control his heat exposure in the shop, which became extremely warm.”

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Opinion of the Court

The supervisor had placed the cooler in a centralized position so it would
cool Barriga’s work area as well as a coworker’s work area. But the
coworker “goaded” Barriga by placing the cooler closer to the coworker’s
work area. The coworker could control where the cooler was placed each
morning because he started work earlier than Barriga. When the coworker
would take a break, Barriga would reclaim the cooler. The exercise of
moving it around the shop between the two men would continue all day.
According to Barriga, he needed the cooler facing him because he had a
medical condition that required he not become dehydrated or overheated,
but he did not disclose his medical condition to the supervisor.

¶5 The supervisor “viewed the tug-of-war between [Barriga] and
the other employee as a game they were playing.” After discussing the
matter a number of times with the supervisor, Barriga again expressed his
frustration and concern about the situation. He told his supervisor he was
being ignored and “that the supervisor was siding with the other, more
senior and more skilled employee who was manipulating the situation.”
Barriga ultimately quit and filed for unemployment benefits.

¶6 An ADES deputy found that Barriga was disqualified from
benefits because he voluntarily left his employment without good cause
and did not show that he was subject to intolerable working conditions. See
A.R.S. § 23-773(A), (B) (providing that a deputy must review applications
for benefits and determine whether a claim is valid and promptly notify the
claimant). Barriga appealed to the appeals tribunal and the ALJ heard
testimony from Precision’s witnesses and Barriga. See A.A.C. R6-3-1503
(claimants may appeal a deputy’s determination to the appeals tribunal).

¶7 After making factual findings, the ALJ quoted portions of
A.A.C. R6-3-50515(C), including the following:

1. A worker who leaves because of inharmonious relations
with a fellow employee leaves with good cause if he is
established that the conditions were so unpleasant that
remaining at work would create an intolerable work situation
for him.

2. In determining whether a situation is intolerable, the
following factors should be considered:

a. Would continued employment create a severe
nervous strain or result in a physical altercation with
the other employee?

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Opinion of the Court

b. Was the worker subjected to extreme verbal abuse
or profanity? The importance of profane language as
an adverse working condition varies in different types
of work.

The ALJ also cited A.A.C. R6-3-50210, which states that a “reasonable
worker will not quit impulsively,” and “good cause is generally not
established unless the worker . . . [a]ttempts to adjust unsatisfactory
working conditions.”

¶8 The ALJ determined that Barriga’s relationship with his
supervisor was inharmonious and created an intolerable working
relationship. The ALJ reasoned that Barriga tried to “work out his
frustrations with [Precision], but he was not seeing a positive result and had
grave doubts about matters improving.” The ALJ determined that the lack
of an effective response from the supervisor, who thought it was merely a
game between the employees, created an intolerable working environment
for Barriga, who had made numerous attempts to address the problem.
Thus, the ALJ concluded that Barriga quit with good cause under R6-3-
50515(C)(1) (inharmonious relations with an employee creates an
intolerable work situation) and was eligible for benefits.

¶9 Precision appealed the ALJ’s decision to the Board. See A.A.C.
R6-3-1504. The Board disagreed with the ALJ’s application of the law to the
facts and reversed the decision. The Board acknowledged the conflict
between Barriga and his coworker, as well as Barriga’s dissatisfaction with
how the supervisor handled the situation, but found these concerns were
merely Barriga’s perception of being ignored. Noting that conflict is the
norm in any environment, the Board emphasized Barriga’s failure to
establish “by any objective standard that remaining at work would cause
him severe nervous strain or would result in an altercation, nor was there
any evidence of extreme verbal abuse or profanity.” See A.A.C. R6-3-
50515(C)(2). The Board concluded that Barriga did not establish he was
subject to intolerable working conditions and thus he failed to meet his
burden to show he quit with good cause.

¶10 Barriga applied for judicial review to this court under A.R.S.
§ 41-1993. We granted the application, appointed pro bono counsel, and
requested briefing on whether (1) a claimant must prove at least one of the
two factors listed in R6-3-50515(C)(2); and, (2) if the rule contemplates that
additional factors should be considered, whether Barriga was subject to an
intolerable work situation.

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Opinion of the Court

DISCUSSION

¶11 We review de novo whether the Board properly interpreted
the law. Figueroa v. Ariz. Dep’t of Econ. Sec., 227 Ariz. 548, 550, ¶ 9 (App.
2011). In construing agency rules, we apply the same rules of construction
we apply to statutes, Stapert v. Ariz. Bd. of Psych. Exam’rs, 210 Ariz. 177, 179,
¶ 7 (App. 2005), meaning we “effectuate the text if it is clear and
unambiguous,” BSI Holdings, LLC v. Ariz. Dep’t of Transp., 244 Ariz. 17, 19,
¶ 9 (2018). When construing a rule, we consider its context and related
provisions that address the same subject. Nicaise v. Sundaram, 245 Ariz. 566,
568, ¶ 11 (2019). If a rule is unambiguous, we apply the text as written
without employing other methods of statutory interpretation. See State v.
Jurden, 239 Ariz. 526, 530, ¶ 15 (2016).

A. Intolerable Work Situation

¶12 Barriga argues he left with good cause under R6-3-50515(C)
and there was sufficient evidence that he was subject to an intolerable work
situation. See also A.A.C. R6-3-50515(F) (applying same “fellow employee”
standard to each “supervisor”). ADES counters in part that Barriga’s claim
that he felt discriminated against must fail because he did not try to resolve
his grievance before leaving. See A.A.C. R6-3-50515(A)(4) (requiring an
employee to address his grievance before quitting unless the attempt would
not be feasible). But the ALJ found that Barriga had a “number of
discussions” with the supervisor about his frustrations with the coworker
before Barriga quit, and the Board adopted that finding.

¶13 Barriga argues the provisions outlined in R6-3-50515(C)(2) are
merely factors for the court to consider and urges us to decline to follow
Murray. In reaching its decision, the Board accepted the ALJ’s factual
findings and then explained that R6-3-50515(C)(2) outlines two factors to
consider in determining whether a work situation is intolerable: (1) whether
continued employment would “create a severe nervous strain or result in a
physical altercation,” and (2) whether the employee was subject “to extreme
verbal abuse or profanity.” The Board concluded that Barriga did not
establish he was subject to an intolerable work situation under either factor,
and thus did not meet his burden to show he quit with good cause. In doing
so, the Board misinterpreted the applicable rule.

¶14 In Murray, this court applied R6-3-50515(C) to determine
whether the employee in that case established intolerable working
conditions under section (C)(2). 173 Ariz. at 523–24. As Murray explained,

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Opinion of the Court

[t]he relevant portion of [A.A.C. R6-3-50515(C)] requires an
employee who leaves due to a disagreeable relationship with another
employee to establish that the conditions were so unpleasant that
continued employment would create a severe nervous strain or a
physical altercation, or subject the employee to extreme verbal abuse,
profanity or physical attack. . . . Without specific evidence that
continued employment created a severe nervous strain or that
he was subjected to verbal abuse, profanity or physical
attacks, see A.A.C. R6-3-50515(C)(1), (2), the record supports
the board’s conclusion that Murray failed to establish good
cause for his voluntary separation.

Id. (emphasis added). To the extent Murray construed R6-3-50515(C) as
being limited to the two listed factors, we disagree with that construction.

¶15 In the unemployment benefits context, every separation from
employment is either a quit or a discharge. A.A.C. R6-3-50135(A)(1). If an
employee quits for good cause, the employee is entitled to unemployment
benefits. A.R.S. § 23-775(1); Ferguson v. Ariz. Dep’t of Econ. Sec., 122 Ariz.
290, 292 (App. 1979) (to be entitled to unemployment benefits, an employee
must show good cause for voluntarily leaving). ADES has adopted a
“reasonable person” test to determine whether an employee has good cause
for quitting. A.A.C. R6-3-50210(A). With regard to quitting due to working
conditions, ADES has promulgated rules describing unreasonable working
conditions in general and for various situations, including inharmonious
relations with fellow employees. A.A.C. R6-3-50515.

¶16 We do not read R6-3-50515(C) so narrowly as to say that only
the two factors listed, (1) severe nervous strain or potential fisticuffs, and
(2) extreme verbal abuse or profanity, are the only conditions that could
ever make a work situation intolerable. When read as a whole, R6-3-
50515(C) requires an employee to show that an inharmonious relationship
created an intolerable work situation. That is the standard, and the context
of related provisions supports our conclusion. For example, “working
conditions” is described, for purposes of R6-3-50515, as “environmental
conditions such as light, sanitation, fellow-employees, etc.” A.A.C. R6-3-
50515(A)(1). If an employee faced a “sanitation” issue that substantially
affected his or her ability to work, it would be unreasonable to find that the
employee could not quit for good cause unless the situation fits neatly
within the confines of the two factors listed in R6-3-50515(C)(2). See A.A.C.
R6-3-50515(A)(1), (2) (explaining that a worker who leaves due to working
conditions must show the conditions “are substantially below those
prevailing in the area for similar work”).

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 BARRIGA v. ADES/PRECISION
Opinion of the Court

¶17 If R6-3-50515(C)(2) was intended to cover the entire universe
of circumstances that could constitute an intolerable work situation, then
ADES would have made it plain that no other factors are relevant. Instead,
the only reasonable construction of the rule is that the listed factors are not
the only factors to be evaluated; they are examples of behavior that may
lead to an intolerable work situation. Moreover, our analysis here aligns
with the established principle that we construe unemployment benefits
provisions “liberally to grant benefits and narrowly to deny benefits.”
Munguia v. Dep’t of Econ. Sec., 159 Ariz. 157, 162 (App. 1988). Our
interpretation of R6-3-50515(C)(2) here, rather than that in Murray, achieves
that goal.

¶18 ADES contends it “never acted as though Murray was
controlling.” Although the Board did not cite Murray in its decision, it
stated:

When determining what circumstances constitute an
intolerable work situation, the rules state that factors to
consider are whether the situation would cause severe
nervous strain or a physical altercation, or whether the use of
extreme verbal abuse or profanity was involved. . . . [Barriga]
did not establish by any objective standard that remaining at
work would cause him severe nervous strain or would result
in an altercation nor was there any evidence of extreme verbal
abuse or profanity.

This is the Murray formulation of the rule, restricting an intolerable work
situation to only the two factors listed in subsection (C)(2). Because the
Board applied an erroneous interpretation of the rule to Barriga’s case, we
vacate its decision.

¶19 ADES also argues that regardless of whether the Board
should have considered other factors, Barriga did not meet his burden to
show an intolerable work situation existed. Because resolution of that issue
requires additional factual findings, it is the Board’s task to resolve it on
remand. See Avila v. Ariz. Dep’t of Econ. Sec., 160 Ariz. 246, 250 (App. 1989).

B. Jurisdiction To Consider Medical Evidence

¶20 Barriga argues that even if he did not establish that he quit
with good cause under R6-3-50515(C), he is still eligible for benefits under
A.A.C. R6-3-50235(B)(3). An employee is eligible for benefits when he quits
“for compelling personal reasons not attributable to the employer if . . . [t]he
work aggravates a health or physical condition which existed prior to the

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Opinion of the Court

[employee’s] acceptance of the job.” A.A.C. R6-3-50235(B)(3)(a). The
employee must substantiate his health or physical condition. A.A.C. R6-3-
50235(A)(2).

¶21 ADES argues we lack jurisdiction to consider whether Barriga
was entitled to benefits under R6-3-50235(B) because neither party raised
the issue in a petition to review to the Board and neither the ALJ nor the
Board considered it. See A.R.S. § 41-1993(B) (“An issue may not be raised
on appeal that has not been raised in the petition for review before the
appeals board.”). That provision does not apply here given that Precision,
not Barriga, filed the petition for review to the Board. It would be
unreasonable to construe § 41-1993(B) as precluding a litigant (including
ADES) who prevails at the appeals tribunal level from raising an issue on
appeal to this court that was fairly presented to the ALJ.

¶22 Barriga testified that he needed the cooler because he had a
medical condition and could become dehydrated if he was not in a cool
environment. Before the hearing, Barriga faxed a letter from his doctor to
the ALJ, confirming his medical condition and stating that Barriga should
not become dehydrated. But neither the ALJ nor the Board considered
Barriga’s proof of a medical condition to determine whether he quit for a
compelling personal reason as defined in R6-3-50235(B)(1). On remand, the
Board should consider all relevant evidence, including Barriga’s medical
condition.

C. Compelling Personal Reasons

¶23 ADES argues that even if we conclude Barriga quit for
compelling personal reasons under R6-3-50235(B), such a finding would not
establish that Barriga is entitled to benefits because he did not quit with
good cause. An employee who quits due to a health or physical condition
may be eligible for benefits if he did so with good cause or for compelling
personal reasons. See A.A.C. R6-3-50235(B); see also Munguia, 159 Ariz. at
163 (“If a claimant is found to have voluntarily left employment without
good cause, the burden is on the claimant to show an excusable compelling
reason or good cause for leaving.” (emphasis added)). Under the plain
language of R6-3-50235(B), an employee need not show good cause and
compelling personal reasons for leaving to be eligible for benefits. If, on
remand, the Board finds that Barriga quit because of a health or physical
condition and had a compelling personal reason to do so, then Barriga is
eligible for benefits.

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 BARRIGA v. ADES/PRECISION
Opinion of the Court

¶24 ADES contends that whether an employee quits for
compelling personal reasons only relates to whether ADES will charge an
employer’s experience rating, and not whether the employee is eligible for
benefits. When ADES pays unemployment benefits to a claimant, ADES
“maintains a separate account for each employer reflecting all contributions
made” toward unemployment benefit payments. Sw. Teamsters Sec. Fund v.
Ariz. Dep’t of Econ. Sec., 157 Ariz. 358, 359 (App. 1988); see also A.R.S. § 23-
727(A). To determine an employer’s contribution rate, each employer is
classified “in accordance with their actual experience in the payment of
contributions and with respect to benefits charged against their accounts.”
A.R.S. § 23-731. An employer’s account is “charged for benefits paid to
former employees . . . unless there is a statutorily defined reason to exempt
the account from being charged.” Sw. Teamsters Sec. Fund, 157 Ariz. at 359;
see also A.R.S. § 23-727(C). Section 23-727(D) provides one such exception:
“[b]enefits paid to an individual whose separation from work with any
employer . . . for compelling personal reasons not attributable to the employer
and not warranting disqualification for benefits shall not be used as a factor
in determining the future contribution rate of the employer.” (Emphasis
added.)

¶25 ADES correctly notes that if the Board finds that Barriga quit
for compelling personal reasons under A.A.C. R6-3-50235(B), ADES will not
charge Precision’s account or experience rating. This does not, however,
preclude a claimant, such as Barriga, from obtaining benefits if the claimant
meets his burden to show he had compelling personal reasons to quit due
to a health or physical condition.

CONCLUSION

¶26 Because the Board applied an erroneous interpretation of the
law to Barriga’s case, we vacate the Board’s decision and remand for
reconsideration consistent with this opinion. In its discretion, the Board
may remand to the appeals tribunal for additional fact finding.

AMY M. WOOD • Clerk of the Court
FILED: AA

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